Kentucky Ranks Last in U.S. for Access to Child Care Assistance, Report Says

Kentucky ranks last in the U.S. for access to subsidy programs that help low-income parents pay for child care costs while they work, according to a report from the National Women's Law Center.

The report released Wednesday compares how each state handles child care assistance programs, which is funded partially through a federal grant.

In most states, the condition of child care assistance programs improved from the previous year—meaning, for instance, more families may be eligible for the subsidy, the report said.

In Kentucky, the program fares worst.

The report was based on data from February 2012 to February 2013—but it took into account cuts Kentucky enacted in the spring and summer to the Child Care Assistance Program. The cuts, enacted because of an $86.6-million budget shortfall, reduced the number of people eligible for the subsidy and also froze the program to new applicants.

“It means that thousands and thousands of families who need this help in order to make sure their children are in safe and supportive care and they can go to work and keep a jacket and keep a job now have no access to the help they need," said Helen Blank, director for child care and early education at the National Women's Law Center.

In Kentucky, critics of the cuts have argued that parents now excluded from the subsidy will resort to unregulated child care (families members or neighbors, for example) or quit work, choosing instead for welfare benefits. They also argue that the cuts harm the state's efforts to improve education for children before they enter Kindergarten.

Blank agreed.

“Obviously, funding has been tight, but I think we also have to look at how we set priorities," she said. "And if you look at the win-win that this program has both for children and for families, you would think that it would go to the top of a priority list.”

In a statement, Kentucky Youth Advocates director Terry Brooks said the National Women's Law Center report shows a need for state leaders to address the cuts.

"Budgets always require tough choices but now, more than ever, Kentucky cannot afford to have a budget that fails to invest in kids," Brooks said in the statement.

Kentucky is one of only two states that has a freeze on new applicants.

Kentucky also hasn't updated its reimbursement rates (the money given to child care centers for each CCAP participant) since 2006, Blank said. Meanwhile, inflation has caused the centers' costs to increase. The ripple goes on—centers pay employees less, meaning holding on to experienced employees becomes harder. That diminishes the quality (and quantity) of Kentucky child care centers, she said.

“This change that the state made, it has so many impacts beyond even the families getting the child care assistance," Blank said. "And it can force more and more families in the state into poverty.”

The report said access to child care assistance nationwide is worse off now than in 2001, though—again—it's better than in 2012. In recent federal budgets, the grant that funds the programs either increased at a rate less than inflation or decreased (under the sequester), the report said.

Kentucky officials have said that this year's cuts were so drastic because they'd exhausted a boost in federal funds from another program provided a few years ago—a trend that the report found throughout the nation. Those state officials have said the cuts were unavoidable because of the funding climate. They haven't responded yet to requests for comment on this study, but we'll update when they do.

Update: The Cabinet for Health and Family Services, of which the Department for Community Based Services is a component, has responded. They say, in part:

Kentucky serves families through the Child Care Assistance Program (CCAP) to the extent that we can within the constraints of the Department for Community Based Services’ budget given the current year budget shortfall.While this report compares certain aspects of states’ child care assistance programs, we believe it doesn’t give a comprehensive description of the level of services offered.Kentucky does not have a CCAP waiting list; many other states do. Although may states with waiting lists may not have lowered eligibility (FPL test), the report does not compare the number of children actually being served.

The report compares the percentage of the market rate paid to providers; however, it does not quantify the percent of dollars spent on families/children vs. providers.

Several states have significantly raised their copays, increasing the percentage of income that a family pays for child care. Kentucky has not. Kentucky’s co-pay as a percentage of income was already among the highest in the nation; thus, this was not an option as a cost containment measure.

Some states serve families that have incomes above 100 percent of the federal poverty level but serve only priority populations, such as special needs children and those in out-of-home care. Kentucky continues its low-income subsidy program for all families who qualify, as well as serving priority populations.As a human services agency, CHFS regrets the level of reductions to CCAP; however, the cost containment measures are necessary to operate within the Cabinet and department budget constraints. While these cost containment measures appear to be on track to enable DCBS to operate within budget, CHFS cannot forecast when the intake freeze and lowered eligibility standards will be lifted. In spite of the budget constraints, Kentucky continued to operate its low-income child care assistance program during the recent federal shutdown, unlike some states.Based on our application activity in the prior year, DCBS anticipated that 2,900 children on average per month would be impacted by the application intake freeze, and 14,300 children on average per month would be impacted by reducing the eligibility for a family to qualify from 150 percent of the Federal Poverty Level (FPL) to 100 percent of FPL. For September 2013, 34,562 children received CCAP as compared to 42,458 during September 2012. It is important to note that the decrease in children receiving subsidy is not necessarily related to the reduction in FPL. For example, children might no longer receive services because the child aged out, the parent is no longer working or the parent failed to keep the annual renewal appointment, so budget cuts will not account completely for the decrease in children served.